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Today’s Summary
Thursday, September 3rd, 2020
Indices: US Stocks suffered their worst day since June in today’s session, with the Dow Jones Industrial Average dropping 808 points or 2.78%. The S&P 500 and Nasdaq slid 3.51% and 4.96%, respectively. The Russell 2000 moved lower by 2.99%.
Sectors: All 11 sectors closed lower. Energy led, but still fell 0.74%. Tech lagged significantly, tumbling 5.70%.
Commodities: Crude Oil futures slipped 0.34% to $41.37 per barrel. Gold futures fell 0.57% to $1,938 per ounce.
Currencies: The US Dollar Index inched higher by 0.14%.
Interest Rates: The US 10-year Treasury yield fell for the fifth straight day to 0.640%.
Here are the best charts, articles, and ideas being shared on the web today!
Chart of the Day
Market seems short-term “overbought,” but cyclical advance has room to run if $VIX bottoms in normal 10%-17% range. pic.twitter.com/gR2dyVSOUW
— Mark Ungewitter (@mark_ungewitter) September 3, 2020
Today’s Chart of the Day was shared on Twitter by Mark Ungewitter (@mark_ungewitter). The chart shows the S&P 500 over the past three years, along with the Volatility Index ($VIX) at the bottom. The S&P 500 had its worst day in over two months today after having its best day in over a month just yesterday. Today’s price action has caused some concern that the top is in. Mark points out that cyclical tops don’t tend to occur when the VIX is this high. If anything, Stocks tend to bottom when the VIX is near current levels. This pullback may deepen into a correction as Stocks work through their short-term overbought conditions. But it would be pretty rare to see the S&P 500 put in a major cyclical top with the VIX this elevated.
Quote of the Day
“It is actually easy to make money in the markets. Try to keep it — that is the challenge.”
– Peter Brandt
Top Links
The Bear Case Starts With Small-Caps – All Star Charts
JC Parets explains why he’s closely watching Small-Caps here.
Big August: Bullish or Bearish? – Almanac Trader
Seasonality expert, Jeff Hirsch takes a look at how the S&P 500 has historically performed in September after big gains in August.
All or Nothing Days Make a Comeback – Bespoke
Bespoke points out that the all-or-nothing days are back (days when the S&P 500’s net daily advance/decline reading is greater than +/-400)
Seasonality Expects a Decline For SPY in September and an Underperformance for Technology – StockCharts.com
Julius de Kempenaer takes a look at sector seasonality in September.
The Corn Moon and a Time of Change – Frances Horodelski
Frances Horodelski shares her thoughts on the current market environment.
Top Tweets
Today was four times worse any day in the last six weeks.
— Eddy Elfenbein (@EddyElfenbein) September 3, 2020
The S&P 500 fell 3.5% today, the day after making a new all-time high.
This was the 3rd largest drop ever after a new high.
Sept '55 down 6.6% and down 6.0% a month later
Nov '91 down 3.9% and down 3.2% a month later
Sept '20 down 3.5% and up/down X.X% a month later— Ryan Detrick, CMT (@RyanDetrick) September 3, 2020
$SPX now just above a trendline connecting higher lows since late June. pic.twitter.com/uxf5tcI2mh
— Todd Salamone (@toddsalamone) September 3, 2020
Here, the market’s return since 1871 with a simple exponential regression line on top. Secular bull markets typically start 50% below the trend line & end 18 years later 100% above the trend line. We’re currently 11 years in & sitting on the line. Note: No evidence of a bubble. pic.twitter.com/wSoFzzv8KY
— Jurrien Timmer (@TimmerFidelity) September 3, 2020
The Nasdaq 100 is the furthest above its 200-day MA since 2000 but at that time it was 59% above a far cry from today's 32% pic.twitter.com/14zjUIC51u
— Andrew Thrasher, CMT (@AndrewThrasher) September 3, 2020
If current uptrend in S&P500 and Nasdaq-100 is to stay intact, it likely needs to hold ascending 21-day EMA (green). Each $NDX pullback since March held it, and most in $SPX did too. Ad nauseam, breadth has been divergent. Closing below could accelerate selling and crack uptrend pic.twitter.com/78bLRAlp5j
— Michael McKerr (@MikeMcKerr_TDA) September 3, 2020
$IWM – Daily outside bar reversal on a pivotal zone. Again, AMZN or AAPL's market cap alone is > the entire index but something to keep in mind. pic.twitter.com/GdPluDbCz9
— PivotTrader ? (@pivotanalytics) September 3, 2020
How the landscape can shift inside 24hrs. I think most knew a sell off was coming. The question now is… is today as bad as it gets or do we get follow through tomorrow? $ACWI is quite important for me. pic.twitter.com/xtwqJBbT4f
— Sam McCallum (@honeystocks1) September 3, 2020
On the bright side, cruise lines and retailers were up pic.twitter.com/iKINn1ooPB
— Sarah Ponczek (@SarahPonczek) September 3, 2020
Today's asset class performance vs. YTD and performance since 3/23. Hottest areas were the weakest while weakest areas held up the best today. Mean reversion. pic.twitter.com/V5cBGvovd3
— Bespoke (@bespokeinvest) September 3, 2020
Materials ending a +2 year bear market. pic.twitter.com/ia6oAg5Ua6
— Strategas (@StrategasRP) September 3, 2020
Even LUMBER is falling pic.twitter.com/5rzGePyQEd
— Katherine Greifeld (@kgreifeld) September 3, 2020
$MSFT big spot pic.twitter.com/F2fPRsh20U
— Gregory Krupinski (@G_krupins) September 3, 2020
Tesla is down 20% in just three days of trading.
P.S. it's still up 368% YTD pic.twitter.com/JZ8gYQ56Wc
— TradingView (@tradingview) September 3, 2020
Haven’t had one of these in awhile. Back to levels we haven’t seen since last week. pic.twitter.com/ZdyiKZcdK8
— Jay Woods (@JayWoods3) September 3, 2020